Beijing is considering making a city neighborhood often called "Russia Town" its first downtown duty-free shopping area, following the announcement last week of a 72-hour visa exemption policy for foreign tourists from Jan 1.

The city authorities have revealed plans are afoot to turn Yabao Road - a retail hub that attracts many foreign traders, especially Russians - into a pilot area for outlets offering tax refunds and duty-free shopping.

"Detailed plans will be made early next year regarding the size of shops and how many brands will be covered," said Hong Guangxin, deputy director of the Beijing Chaoyang municipal commission of commerce.

The traditional center of trade in goods from Russia and other eastern European countries is located near the Second Ring Road, alongside an area famous for fur trading.

Hong said the city authority signed a strategic cooperation letter with China Duty Free Group in May during the China Beijing International Fair for Trade in Services, which mapped out joint plans to set up duty-free shops in the capital's CBD area.

Under the agreement, foreign tourists will be able to receive tax refunds and shop for duty-free products in the city center, instead of only at the airport.

The duty-free shopping will mainly cater to foreign tourists, and it remains uncertain whether it will be open to local residents who plan to leave the country, it said.

On Yabao Road on Monday, vendors knew little of the plans, and some voiced concern over the possible impact of large-scale duty-free outlets in what is already a fiercely competitive shopping area.

Stall and shop owners said business at Yabao Market has been sluggish since the beginning of the year, and they blamed the strengthening of the yuan against foreign currencies.

"It is increasingly difficult to do business right now, and foreign travelers have been less willing to spend as their currency devalues against the yuan." said Fang Yingqiao, a Chinese tea dealer.

"Previously, they were generous with their spending. Now they are increasingly shrewd in their bargaining," she added.

Qiao Yongfang, who runs a wholesale business selling tablecloths at the market, said she hoped the new duty-free zone would bring more expatriate shoppers.

"The duty-free mall could have more impact on retail shops. I only hope more wholesalers will be included," she added.

Alyona Belousova, a 30-year-old from the Russian city of Novosibirsk, said she was looking forward to the duty-free zone.

"I like Yabao Road because the goods here are so cheap. I hope the duty-free area will maintain its price advantages," she said.

Beijing officials announced last week that visitors from 45 countries who hold a ticket to a third country can remain for three days in the city without a visa.

Under the policy, the foreign tourists must remain in Beijing, and anyone traveling to other cities without permission could face prosecution, according to Gao Huada, deputy director of the exit-entry administration of the Beijing Public Security Bureau.

The Chaoyang municipal commission expects the visa exemption will attract another 600,000 to 800,000 transit tourists next year.

Lu Yong, director of the Beijing Tourism Development Committee, said that setting up an international standard, duty-free zone in the city will improve tourism levels.

The new visa rules will apply to citizens of 45 countries, including the United States, France, Italy, Canada, Brazil, Germany, Spain, Australia, Argentina, Japan and Singapore, according to the committee.